The queen’s been in her parlour, eating bread and honey; the king’s been in his counting house, counting out his money: word is, Eskom’s been given the thumbs up on its Medupi loan by the high royalty of IFIs, the World Bank herself.
Barbara Hogan is a laudable politician, brave and coolheaded, and I take what the lady says seriously. So when Hogan proclaims that the loan decision is something of a macroeconomics sudden-death scenario, it gives me pause for thought: “If we do not have that power in our system, then we can say goodbye to our economy and to our country. This is how serious this thing is. The construction of Medupi … is necessary so that we do not derail the country’s economic growth and development.”
Medupi is the government and its parastatal’s answer to the black-outs the country has been experiencing for the last few years. Our existing installed electricity generation capacity is inadequate to the demands being placed on it. And those demands are growing. It is, as some have pointed out, something of a crisis: not only does that vague entity the economy depend on electricity, but so do a lot of not-so-vague entities likes schools and hospitals and the railways.
So viva huge loans from the World Bank, viva! Right?
Well, we can, start very briefly, with the celebrated “conflict of interest”. Or whatever it is you call it when it slips Valli Moosa’s mind that he’s allocating a tender to a company, Hitachi Africa, that his own political party has a 25% stake in. The ANC stands to make a tidy R1 billion in clear profit. You can read all about the DA’s objections, investigations by the public prosecutor etc in the M&G. Then there are the local environmental concerns, the debt, the electricity price hikes, the reliance on capital-intensive, labour-diffuse projects and the global environmental concerns.
Given all these objections Eskom has had a hard time selling the project and some notable heavyhitters like the US, Britain and the Netherlands refused to support the loan. Eskom has pleaded desperation, social benefits, economic benefits and green benefits to boot. The plant will employ dry cooling technology which reduces water consumption by 90%, its supercritical boilers will reduce emissions by 5%. It will employ people in construction and operation. some of its budget is reserved for investment in renewables. The electricity it generates will go towards electrifying millions of rural households and help the poor with jobs and energy …
But as a supercritical, drycooling, big(ger) budget, school-building coal smoker, Eskom’s Medupi is a bit like Crocs trying to bring out a three-inch heel — they get points for trying but everyone still thinks it’s a damn ugly shoe. Medupi will be the seventh biggest power station in world, and let loose some 30 kilotonnes of CO2 per annum, without taking the SO2 into account. We are not talking about a slight increase in our contribution to climate change — this is a more than 7% increase in the totals emissions of one country, already a huge polluter, from a single project. Medupi alone will emit “more than 115 other countries including Kenya, Luxembourg, Burma and Croatia”. Our national emissions are already staggering, whether you look at it on a per capita or on a national basis, and damning when one considers that almost all of this comes from a small middle-class and industry. The “ordinary” South Africans that it is supposed to benefit are also expected to pay for it with astronomical electricity price hikes whose benefits will mostly accrue to industry.
This is one of the trade-offs my degree is supposed to be all about: weighing up what we consider as the necessaries for economic development against their social and environmental externalities, and weighing up what “necessity” really means. But the Medupi issue leaves me queasy and uncertain. Certainly Eskom could be doing a huge amount more to invest in renewables, but even with huge injections of cash and political will the renewables sector is not going to be able to provide energy on this time-frame. This is a power plant that should have been built a decade ago. It is also one which will be supplying to the grid within four years. It has the capacity to generate 4800MW. Eskom is also planning a concentrated solar power plant which will be one of the biggest of its kind in the world: its capacity will be 100MW.
The US and Britain, though, were right to refuse support for this loan. There needs to be a concerted trend away from these technologies, and cutting off finance for them is a good place to start. What will help South Africa in the short term by providing the energy infrastructure for a growing economy will possibly harm the country in the medium term with sanctions on our emissions. And it could devastate the region in the long term due to its contributions to climate change. (Though these countries are also hypocrites — both the US and Britain are planning to build new coal-fired plants).
This kind of project is also toxic in the context of coming to a legally-binding agreement to tackle climate change. “Common but differentiated responsibility”, as UN speak has it, is what creates the complex dual allowances for countries under agreements like Kyoto. It effectively grants “pollution rights” to countries with less historical responsibility for causing the carbon problem and have less funds to pay adapting to it. But when middle-income countries use this leniency to radically upscale their carbon contributions, they effectively set up shop as high-carbon economic zones to encourage foreign investment and trash the just intentions of this system. A concept developed to promote equity has turned into an excuse to allow ever increasing carbon dioxide concentrations in the atmosphere. In the midst of a negotiation process to fix emission targets this is the Scramble for the Atmosphere, and claiming a right to pollute is an act of annexation — South Africa, fat cat of the continent, has lifted up its meaty thigh and stamped its foot down on a large swathe of the blue sky.
“The Medupi Power Station, which means ‘rain that soaks parched lands’ symbolises economic relief to the area where it will be constructed,” says Eskom’s website. It is a concept that brings immediately to mind visions of the droughts that climate change is due to bring to Southern Africa in the next decades — periods of drought longer than any we have had before. Let us hope that it will indeed be possible to build this plant and still water the dry lands of Limpopo Province, now and in the far future.
Historical responsibility, definitions of economic necessity and national pride flavour these issues differently for all of us. But at the end of the day the climate is a less discriminating mistress and to her dull palate a tonne of CO2 from South Africa tastes just the same as a tonne from anywhere else. The Medupi decision should be greeted with gravity by both its supporters and its detractors. From now on there can absolutely no excuse for the government not to put all its money, mouth and muscle behind renewables and green jobs.
An accurate expression of my own doubts about this loan.
What, exactly, are we bequeathing to our children … apart from a gigantic debt?
Do we care?
I enjoyed this post. Convinced by most of what you say except for your support for green jobs – not convinced government should be picking winners. But even there I suppose it depends on the model.
I’m wagering we haven’t seen the last of the Eksdom hand holding out the begging bowl. Most individuals and businesses will soon be forced to drastically lower their electricity consumption (or else the family silver will have to be sacrificed – no wait! that’s already been done through onerous taxation and wasteful government expenditure?) Coupled with all-round price increases (food, fuel, warra warra), production’s going to go the other way: further down the tubes, with the economy following suit. Then Eishkom’s revenues will also go plunging down even quicker and deeper than a bungee jumper without a bungee (and we all know what that will result in, don’t we?)
Therein lies the irony: In the end we may not even be needing this coal-guzzling monstrosity anyway, because we’ll all only be able to afford candles (that is, if Sasol doesn’t go and do a dirty on us with paraffin wax prices).
This was a simple, but dangerous, trade-off between a massive fossil fuel-burning powerstation, 25% owned by the ruling party, and a relatively safe and clean pebble-bed reactor. Guess who won? And did I hear the spin-doctors say that the World Bank has changed its tune?
And it requires water from Gauteng to make it work that will kill our agriculture; destroy business and ruin the country. More acid rain, less water in the “waterberg”; loss of tourist attractions and power for industry – not the people.
Solar and wind plants take 18 months to construct, coal fired plants about 6 years or more. This is SA’s opportunity to get onto the band wagon and develop build a local and export renewable energy plant and equipment industry, instead we are going to constuct a dinasaur that will destroy the livlyhoods of future generations through climate change.
Worldwide wind capacity is now over 121 GW, with over 27 GW added in 2008, creating 440 000 jobs and worth over €40 billion.
China – Last year, 10,129 sets of wind turbines were installed, totaling 13,803MW, up 124 percent over the previous year. By the end of 2009, China’s total installed wind turbines reached 21,544, amounting to 25,805MW, up 114 percent over the end of 2008.
So China now has more than half of South Africa’s total power generation capacity from wind turbines alone.
Makes you think doesn’t it?
And your point at this late stage is?
Actually, Medupi is necessary to allow Eskom to export power to surrounding countries and to non-SA-owned smelters. Forget rural communities, Eskom has.
While you have your pencil sharpened, why not do a piece on the R100bn needed urgently for bulk water infrastructure to allow the mines to contribute more to GDP? At least you might have some influence there, because I doubt Treasury’s got that tucked in its back pocket just waiting to flash around.
Fact is, we’ll be paying of WC debt and Eskom loans while the ANC’s still working out why anyone would need clean water when you can buy it bottled.
So give acid mine drainage a whirl before it’s too late.
Next thing we will be forcd to pay a Carbon tax on the dirty electricity the Government is forcing on use.
@Bibliophile
Relatively safe nuclear Pebble Bed reactor?? You mean the one that Germany abandoned in 1986 after an accident.
For more on relatively safe nuclear power plants read:
‘THE CODE KILLERS: AN EXPOSE ‘
Alternate title: Nuclear Power, Nuclear Weapons, Corrupt Government,
Corporate Greed, Mass Hysteria, General Ignorance, and Your DNA: A Dangerous
Mix? A look at the Data
by Ace Hoffman
First published: 2008
Available free from:
http://www.acehoffman.org
Try blowing in the wind my friend. Now thats clean energy, no CO2 pollution and no nuclear radiation that kills people living in the vicinty of nuke power plants.
@Bibliophile
Neither nukes nor coal are clean.
Uranium mining is an environemntally destructive practice, and the price of uranium has increased several fold in a few years making powering a nuclear plant extremely expensive. As uranium mines get deeper and the ore of poorer quality this will increase even more. There is no safe repository for nuclear waste anywhere in the world, and living in the vicinity of a nuclear plant increases leukemia in children. Decommissioning aging nuclear plants is becoming increasingly expensive and a nuclear accident like Chernobyl would wipe the South African economy right off the map to ever clean up.
If money wasted on the PBMR nuke plant had been used on renewable energy we would not be in the mess we are now in.
Stop throwing more good money after bad money, keepin in mind that no nuclear plant has ever come been completed on time or on budget anywhere in the world.
No wonder the World Bank refuses to loan money for nuclear plants, cannot work out why they do for coal fired plants though, maybe they also have shares in Hitachi.
By the way research published in the USA shows that 25 000 people die each year from the pollution caused by of burning coal. Anyone have statistics for South Africa? Not that it matters, at least the ANC gets its R 1 billion in clear profit, no matter how many lives are lost.
So Eskom moves from 1st world Ulity leader (under apartheid) to the begging bowls in 15 years. Well done ANC. The world bank loan would have been adequate to pay 80% of a suitable powerstation, but, adding back ANC kickbacks, the loan now only covers 20% of the purchase price- so where will Eskom find the balance- from our pockets naturally. So watch out for a further price application of around 60-70% as the price for Medupi escalates to over R200bn according to insider estimates.(It has already moved from R33bn to over R150 bn)
Eskom will have set a record for the most expensive power station in the history of mankind. Flippen record of achievement for the ANC, and nearly challenges the most expensive arms deal in the world.
On top of that we run the most expensive government in the world (per capita) so what else may be next on the ANC’s record of acjhievement- the most farm murderes in the world? The most wives in the world for their president? The most children in the world?
Anc and Zuma make SA the laughing stock of the World and Malema confirms this – even he thinks Zuma and his executive are a bunch of brainless punks.Who will prove me wrong?
The EIA report by the African Development Bank states that 30 000 kilotonnes of Carbon dioxide equivalents will be released by Medupi per annum, and not just 30 kilotonnes as stated in your article. This amounts to a 7% increase on the 2000 greenhouse gas inventory which reported the total emissions for South africa as being 436 257 kilotonnes (Gg)
Water scarcity as you have highlighted is a very real and looming crisis. Not many of us recognise this, while our dams are full to overflowing. But talk to families in the Eastern Cape trying to limit their household consumption to 5 kilolitres per month, to understand how difficult this is, when one is used to turning on a tap any time of day or night. All of the water that we have available is fully allocated. We will all feel the effects in the not too distant future. Recycling of sewage water (as has been done in Namibia for decades) is an option that should be considered by all municipalities. Rainwater harvesting must be legislated, especially for all new housing developments
@Free Speach
The reason you are wrong is Helen Zille’s Democratic Alliance support the World Bank loan as long as the ANC does not benefit finacially from it.
Neither the DA nor the ANC give a damn that 25 000 people die a year in the USA from pollution caused by burning coal. No figures for South Africans that will perish from this power plant but they don’t care. Neither the DA nor the ANC care about the devastation caused by climate change due to the construction of this plant. The DA and ANC are two peas out of the same pod.
It is clear we need a lot of power, and asap. Unfortunately only coal can deliver that at present. Sorry Froggie, alternatives fall down on cost, reliable availability, capacity, etc. Medupi would be the equivalent of three of the largest nuclear plants, which would not be viable as a quick fix required due the decade of negleced planning by Eskom/government.
Now someone must explain to me how under the ‘hated and corrupt’ apartheid government, Eskom managed to build and bequeath a notable power excess to the new dispensation (due to earlier optimistic predictions regarding the rate of increase in electricity demand) with no horrific increases and financing nightmares, despite sanctions and all that. How come it has apparently become so much more expensive to build power stations. Somehow it does not make sense. Eskom would make a much more credible case if they compared e.g. Medupi costs item for item with a comparable station built in the eighties.
@chris2
Yup the cost of those who lose their lives from coal pollution don’t count to you do they?
The cost of the economy shrinking 20% due to climate change does’nt come into your equasion either does it.
The people who die from increased disease, starvation or displacement due to rising seas, droughts and freak weather from climate change does’nt count to you does it?
The CEO’s of fossil fuel industies must be held acountable in international courts from crimes against humanity for their contribution to climate change.
They will then do their costings slightly differently.
@Chris2
Coal power stations take about 6 years to construct, wind and solar facitities about 18 months. If we need lots of power fast then obviously renewables are the answer.
Renewable energy installations may cost more to construct, but you don’t have to feed them with fuel once up and running, mother nature does that for free.
Its time to get rid of the fundamentalist coal is the only answer mentality.
Dear critics Froggie & Jane, I did not make a value judgement on coal-fired stations. I tried to point out that the shortage has been allowed to escalate to such a point that very significant extra capacity is required. You cannot start your car using a cellphone battery (except by phoning the AA, perhaps). It is cheap to talk about alternatives without being specific. Things like wind generators need pretty constant wind conditions, which are rather rare, and they have their own environmental and maintenance problems. The output per unit is pretty paltry.
The original PBMR concept was a decentralised nuclear net of small, inherently safe reactors, which could be deployed incrementally. It could have been a reality if the company had restricted itself to small improvements on the German design. Being too ambitious in engineering design can often be fatal. Their loss of focus could partly be blamed on Eskom’s planning hiatus.
The French swallowed their (considerable) pride and began building and improving a US pressurised water reactor (PWR) design and today about 80% of their electricity is nuclear generated. An unprecedented success story. And they are not dying like flies.
@Chris2
I provided specifics of wind generation growing exponentially in the rest of the world, just scroll up. South Africa is getting left behind. Jane provided specifics on nukes, scroll up.
It is you who are trading on generalistions.
Remember both nuclaer energy and coal energy are dirty, they are killers, they have to be phased out.
Why would James Lovelock, the father of Gaia and arch-environmentalist, be very much in favour of nuclear? A lot of misinformation and questionable ‘science’ has been used to try and smear nuclear. Be careful who you believe in this regard. If you knew how much uranium is in your backyard you might tend to become a boat dweller.
The question is not only installed wind capacity, but how much is actually delivered on average. I would like to see SA industry building and installing 4000+ windmills in the claimed 18 months, with proper environmental impact studies and properly researched long term wind patterns. How many birds do you want to sacrifice? Wind generators proliferate where they are strongly subsidised. Who pays here?
But I am not looking for an argument here. Medupi will obviously go ahead, but the voters need to demand that the effluent be cleaned to present-day demanding standards. My main worry is the apparently inflated cost, which should be properly justified, and ANC government conflict of interest.
@Chris2
The World Bank will not fund nuclear power stations, so no matter what James Lovelock said you ain’t gonna get World Bank funding for nukes!!!
There have been promises and promises that SA will get investors for PBMR, but after so many years none have appeared. Just more propaganda from the PBMR company obviously.
Even the South African government has admitted that nuclear energy is extremely expensive, recently canceling the contract to construct a new nuclear plant. In the U.S. uranium now costs $60 per 450 grams compared to $10 per 450 grams nine years ago, and there is still no safe repository for nuclear waste anywhere in the world. The cost of mining uranium can only increase exponentially as mines become deeper and poorer grade ore has to be exploited. In the worst case scenario of a Chernobyl type accident the costs could be as high as $ 700 billion, which would wipe the South African economy off the map. The cost of decommissioning aging nuclear plants is also spiraling out of control.
Uranium leak prompts France to test water at nuclear plants: The French government has ordered testing of the groundwater water around all 58 of the country’s nuclear reactors, after tests showed traces of uranium pre-dating the recent leak of 30 000 litres liquid containing unenriched uranium at Areva’s Tricastin plant.
China actually now has more than half of South Africa’s total power generation capacity from wind turbines alone.
@chris
“A lot of misinformation and questionable ’science’ has been used to try and smear nuclear”
There are even more outright lies put out by the nuclear industry, don’t fool yourself, because you are not going to fool me.
@Froggie & Jane,
Timeout. We have dropped off the menu. Try and obtain less biased sources on nuclear energy. Cheers till next time.
@Chris
The truth never drops off the menu.
Solar Power Systems Become Cheaper Than Coal (and obviously nuclear)
http://www.nlpwessex.org/docs/solardawn.htm
Children living near nuclear facilities face an increased risk of cancer.
http://globalresearch.ca/index.php?context=va&aid=8785